Is e-filing really a better way to file your taxes?
Americans and the IRS may not agree about everything, but they are mostly on the same page when it comes to e-filing individual income tax returns.
The majority of individual income tax returns filed to the IRS are e-filed. E-filing is a favorite as it’s a win-win for taxpayers and the IRS.
If you e-file your federal income tax return, you conserve the IRS money because its workers don’t need to spend time manually processing your return. And in return, you could get any refund you are owed quicker, particularly in the event that you have it directly deposited to your bank account.
However, what about safety? And can electronic filing actually give you access to all of the forms you might need if you have a complex tax situation? Are there ever situations when you can’t e-file? Let’s look at the benefits of e-filing, and whether it might be the very best filing option for your requirements.
If you are Considering e-filing, a Few of the advantages include:
- Quick confirmation your forms have been obtained: The IRS will affirm a tax filing was received within one day of electronic submission. For paper filers, the IRS does not send any acknowledgment that your forms have arrived safely.
Timely refunds: When you submit a paper filing, it may take six to eight weeks to be given a tax refund. With e-filing, you’ll receive your money in three weeks or not. Choosing direct deposit can also speed up the refund process.
Reduced chance of errors: According to the IRS, there’s approximately a 1% error rate on e-filed returns, compared with a 20% rate of errors on paper filings. The IRS also provides more information on problems discovered on e-filed returns compared with paper returns.
Easy payment procedure: If you owe the IRS money, it’s easier to pay at your advantage when you e-file. You can submit returns early and pay later if necessary, as long as you pay by the April 15 filing deadline. Additionally you have the choice to pay your balance by making use of the IRS Immediate pay service from the checking account or savings accounts, submitting a credit card through a payment processor for a fee, or paying by check or money order.
Digital storage of tax information: Submitting returns electronically implies there’s an electronic backup of your tax records. So if something happens to your paperwork, then you will have an electronic backup.
The good news: Most taxpayers do opt to e-file and get those benefits — and the practice of doing this is easy.
How to e-file a tax return?
You have four options for submitting an electronically filed tax return to the IRS.
- Use IRS Free File: If your adjusted gross income is $72,000 or less you could have the ability to use the IRS Free File program. The types do the math for you and provide standard guidance. You can only do your federal return with these forms.
- Utilize an internet tax preparation tax or service software: Tax prep software and online filing services are alternatives. These options are a simple way to complete and e-file your forms. Some software providers charge for their programs, Some are free. The program asks you simple questions about your life and finances to guide you through the completion of your forms.
- Get free, in-person tax help: In most states, you will find volunteers to help prepare and e-file returns. However, eligibility for free help is normally restricted based on income, and some services appeal to specific demographic groups. For instance, Tax Counseling for the Elderly programs focus primarily on helping filers who are 60 and older.
- Hire a paid preparer: Paid tax preparers, including CPAs, can e-file returns for you if they’re authorized IRS e-file providers. The IRS maintains a database of licensed providers, but be aware this alternative is likely to be the most costly one.
Using online tax preparation software is far and away the favored approach of the majority of taxpayers. Actually, the IRS says it expected more than four tax returns to be submitted through tax return prep software.
Is e-filing really stable?
While e-filing is suitable, you could be worried about safety — particularly with all these data breaches. But experts agree that this isn’t an issue which should dissuade you by e-filing.
“In actuality, it can be more secure than paper filing since you’re sending your personal information through an encrypted network as opposed to exposing your information in the email.”
Dennis Chow, vice president of data security at SCIS Security, clarifies the IRS has put safety measures in place to keep your information safe. “Trainers normally use IRS particular APIs that require ab sessions,” Chow says. “All of this can be routed over TLS encrypted links .”
It’s very important to employ a trusted service that will assist you file your taxes. Chow advises not to e-file on a public computer or utilize an online connection that isn’t private.
For many taxpayers, it is sensible to e-file a return since it is the most convenient way to file your tax information to the IRS and it allows for timely refunds and easy payment options. Just be sure that you use tax preparation software from a dependable source, so you may ensure the information you provide to transmit to the IRS will be kept secure.